New Amendment Affects Filing Proofs of Claim
Kegler Brown Creditors' Rights + Bankruptcy Alert December 1, 2011
Federal Bankruptcy Rule of Procedure 3001 has been amended effective December 1, 2011. The amendment affects the filing of proofs of claim.
All documents relating to security interests and perfection of security interests must be attached to proofs of claim. If the documents are not available, the creditor must attach an explanation as to why they are not available.
The rules now require more itemization for claims involving arrearages or interest and other charges. In particular, proofs of claim relating to mortgage arrearages will require significantly more itemization than in the past. New worksheets are now required to accompany the mortgage claims.
The bottom section of the proof of claim form now contains a box to be checked disclosing whether the signer is the creditor, creditor’s agent, trustee, or a guarantor/co-debtor.
These rule changes will also affect secured creditors where the loan interest rate changes or additional expenses are incurred during the pendency of the bankruptcy case. If the monthly payment amount changes due to an adjusted interest rate or changed tax amounts, secured creditors in chapter 13 cases will be required to file a supplemental proof of claim at least 30 days prior to the effective date of the change. Courts have a specific form for the supplemental proof of claim.
If a secured creditor incurs additional permissible expenses after the petition date (for example, taxes or forced place insurance on real property), the creditor must file a supplemental claim within 180 days after the expenses are incurred. The supplemental proofs of claim must be served on the trustee, debtor, and debtor’s counsel.
Some chapter 13 trustees have a practice of filing a “Motion to Deem Mortgage Current” after all payments are made as required by a confirmed plan. If a secured creditor fails to file a timely supplemental proof of claim to set forth additional expenses incurred, the creditor will likely be barred from collecting the additional expenses and payments if it then attempts to object to the Motion to Deem Mortgage Current.
This new rule will require vigilance on the part of secured creditors in chapter 13 cases if they wish to be paid for additional expenses incurred in servicing their loans.